Revised Credit

Unlocking Credit & Identity Theft

Introduction Jesse Ostdiek Pinnacle Bank Real Estate Broker Vice President- Mortgage Lending 402-960-0330 [email_address]

What to learn… What is FICO? Range & Averages How it helps you What makes up your score Tips to improve your score Credit Statistics Your Credit Report What’s inside Myths and Truths Errors & How to Correct them Your Rights How to monitor & freeze your credit Identity Theft Statistics How they get your info 6 Warning Signs How to Protect Yourself What to do if it happens

Your Fico Score FICO - Fair Issac Corporation (credit scoring model) Important measurement that affects your ability to get credit, the terms & payment Most trusted and widely used score 720 785 684 585

What is a FICO Credit Score 3 Digit Score: Estimates a consumer’s willingness & ability to repay a debt based on previous behaviors Statistical analysis that removes the judgmental & subjective aspects of determining whether credit should be granted Over 75% of mortgage lenders & 90% of the top 100 lenders use it to determine credit worthiness

Range & Averages Ranges between 350 to 850 Most fall between 600–800 > 740 equals the Best Rates & Terms Nebraska average: 695

Does it Really Matter? Borrower 1 $240,000 30 Yr Mortgage Loan Score: 741 4.75% with Monthly P&I : $965 Total Interest: $162,400 Borrower 2 Score: 739 4.875% with Monthly P&I : $979 Total Interest: $167,450 Costs $14 more monthly, $168 annually or $5000 more over 30 yrs Borrower 3 Score: 640 5.5% with Monthly P&I : $1050 Total Interest: $193,000 Costs $95 more monthly, $1,140 annually or $30,600 more over 30 yrs

How Credit Scoring Helps You People Get Loans Faster Credit Decisions are Fairer Credit Mistakes Count for Less More Credit is Available Credit Rates are Lower Overall

What Makes Up Your Fico Score 35% - Payment History 30% - Amounts Owed & Type 15% - Length of Credit History 10% - New Credit 10% - Types of Credit Used

Tips on Improving Your Credit Score Payment History Get Current & be on time Avoid collections, they stay for 7yrs Amounts Owed Amounts Owed vs. Available Credit Keep low balances , increase credit limits Length of Credit History New accts lower your overall avg acct age Longer history with creditor is better New Credit Rate shop within 30 days Limit requests for new credit Types of Credit Use Use all types of credit including credit cards

Credit Statistics # of Credit Obligations Per Person Past Payment Performance Credit Credit Utilization Total Credit Utilization 13; of which 9 are credit cards & 4 installment 40% of credit card holders carry a balance of < $1000 15% are in excess of $10,000 < than 50% have been 30 days late Only 3 of 10 have been 60 days late 77% have never been 90+ late Excluding mortgage, 48% carry less than $5000 of debt. 37% have more than $10,000 in debt

Credit Statistics Total Available Credit Length of Credit History Credit Inquiries Typical consumer has access to $19,000 on credit cards More than half use < 30% of limit 1 in 17 use > 80% of card limit Avg. consumer has had only 1 inquiry in the past year. Fewer than 6% had 4+ in last year Avg. oldest trade line is 14 yrs 25% have 20+ yrs of credit history Only 1 in 20 have < 2 yrs of history

Unlocking Credit & Identity Theft Your Credit Report

What’s In My Credit Report? Identifying Information Name, Address, Social Security #, DOB, employment & residence history. This info is not used in determining your credit score Trade Lines Your accounts, payment history & specific details of each acct Credit Inquiries List of all creditors that have accessed your credit recently Public Record and Collection Items Information collected from state & county courts including overdue debt from collection agencies, bankruptcies, liens, child support & judgments

Who Keeps Track of My Credit The Three Credit Bureaus Experian Equifax TransUnion You have the right to access Your Credit Report Once Each Year from each or 3 times a year total AnnualCreditReport.com

Types of Credit Reports One Bureau Credit Report Most Companies Use Consumer can pull for free One or no FICO scores Tri-Merged Credit Report Most Mortgage Lenders Use Combines all three Bureaus All three FICO scores *Consumer Report More Secure: No Social security or account numbers shown Free if denied for credit, must request in writing

Credit Score Facts & Myths Myth Score solely determines whether I get credit A poor score will haunt me forever Credit scoring is unfair to certain types of people My Score will drop if I apply for new credit Fact Lenders use many factors in determining whether to loan. Just the opposite is true. It is a snapshot of your risk at that particular moment. No, credit score only considers credit related information. Not Necessarily. You have 30 days on auto and mortgage inquiries to make inquiries without penalty.

Fixing Mistakes & Errors How Credit Mistakes are Made Person applies under different names (Robert Jones vs. Bob Jones) Clerical Errors in reading or inputting Loan or Credit Card payments applied to wrong account Fixing Credit Errors Contact both Bureau & Creditor to dispute Online or mail Both are responsible for correcting the error

Sample Credit Report Dispute Letter Date Your Name Your Address Your City, State, Zip Code Complaint Department Name of Credit Bureau Address City, State, Zip Code Dear Sir or Madam: I am writing to dispute the following information in my file. The items I dispute also are encircled on the attached copy of the report I received. This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted ( or request another specific change) to correct the information. Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible. Sincerely, Your name Enclosures: (list what you are enclosing)

Know Your Rights Right to receive copy of your credit report from each bureau once per year To know the name of anyone who has received your credit report or inquired Receive your credit report, upon your written request, if you have been denied for credit Have right to add a summary explanation to your credit report regarding disputes

Credit Monitoring Options Review your credit report from each bureau annually Federal law gives you the right to one free copy of your credit Annualcreditreport.com ( consumer site) Other sites like freecreditreport.com sell their services Subscribe to Monthly Monitoring Service: Use one of the three bureaus monitoring service Costs range from $5 to $25 for basic monthly monitoring

Lock or Freeze Your Credit A Security Freeze means your file cannot be shared with potential creditors. No new accounts can be opened without contacting you & getting your permission Can prevent new account identity theft Can be temporarily unfrozen $15 per Bureau per person Step by Step Guide: http://www.consumersunion.org/pdf/security/securityNE.pdf

Identity Theft “ Prevention is Better than the Cure”

ID Theft Statistics – 11 million How they get your info 6 Warning Signs How To Protect Yourself What to do if Identity Theft Strikes You?

2009 Statistics 11.1 Million Adult Victims Increased by 12% Highest increase in last 7 years Total Fraud Amount: $54 Billion 4.8% of the U.S. population was a victim of identity fraud Average Fraud Amount : $4841

2009 Statistics 13% of fraud Committed by someone the victim knew 21 hours & $373 Time & Money spent out of pocket resolving the crime 18-24 Year Olds Most likely victims Time Until Discovery: 38-48% within 3 months 9-18% take 4+ years Odds of Thief Going to Jail: 1 in 1000 Estimated $221 Billion a year lost by businesses worldwide

How they get your Personal Info Lost or stolen Wallets Card Skimming Mobile Smartphone Mailbox raiding/dumpster diving Online Methods-Email Data Breaches “ Friendly Theft”

By The Numbers 43% From Stolen Wallets Or Documents 11% Stolen Online 38% Debit/Credit Card Numbers Stolen Albert Gonzalez 30 Million credit card and account numbers stolen Several large corporate databases hacked Over $200 Million in Losses

6 Warning Signs of Identity Theft Receive billing statements for credit you’ve never applied for Your Credit Card bill doesn’t come at all You billing statement includes charges you didn’t make Your credit card is unexpectedly declined for being over the limit Calls from debt collectors about accounts that aren’t yours Unexpectedly denied for a credit card or loan

How to Protect Yourself Monitor Your Credit Computer Security Protect Sensitive Information

Monitor Your Credit! Alert you to new credit & inquiries Some monitor web for your info Services cost $10-20 per month Critics say you can do most of this Identity Theft Services Life Lock ID Watchdog

Basic Computer Security Password protect your home wireless network Don’t download attachments w/o scanning Keep Up to Date Security Software Anti virus & anti spy ware Use a Firewall Install Windows Updates Be careful where you click-phishing

Basics of Protecting Your Information Use a Shredder! Opt out of pre-approved credit offers Safeguard your SS# Don’t email sensitive information Don’t print SS / Driver’s license # on checks Consider a Locked Mailbox or PO Box Cut up Old Credit Cards Shop securely online

What to do if it happens to you? Notify, monitor & freeze Credit Contact creditors immediately if an account is opened Report to Law Enforcement If checks, ATM, Debit cards or Bank accts are stolen, contact your Bank immediately Report to FTC Keep good records http://www.privacyrights.org/fs/fs17a.htm

In Summary….Lets Review What is FICO? Range & Averages How it helps you What makes up your score Tips to improve your score Credit Statistics Your Credit Report What’s inside Myths and Truths Errors & How to Correct them Your Rights How to monitor & freeze your credit Identity Theft Statistics How they get your info 6 Warning Signs How to Protect Yourself What to do if it happens

Credit Bureaus Transunion 1-800-680-7289 www.transunion.com Fraud Victim Division P.O. Box 6790 Fullerton, CA 92834-6790 Experian 1-888-397-3742 www.experian.com P.O. Box 9532 Allen, TX 75013 Equifax 1-800-525-6285 www.equifax.com P.O Box 740241 Atlanta, GA 30374-0241

Other resources Annual Credit Report www.annualcreditreport.com Reduce Telemarketer Calls 1-888-382-1222 www.donotcall.gov Protect Your Privacy Remove your name from pre-approved credit applications www.optoutprescreen.com U.S. Department of State Report lost or stolen passport 1-877-487-2778 www.travel.state.gov Social Security Administration Only to replace a missing or stolen social security card www.ssa.gov Federal Trade Commission 1-877-438-4338 www.consumer.gov/idtheft

Other Resources Identity Theft 911 Extensive Online center www.identitytheft911.org Privacy Rights Clearinghouse Nonprofit consumer info www.privacyrights.org Identity Theft Resource Center Non-profit support www.idtheftcenter.org US Postal Service www.usps.com State Attorney General www.naag.org

Learn More…. Visit our website PinnacleBankRealEstate.com 402-960-0330 Credit and Identity Theft Education For a Copy of this presentation Click “Home”, then “Credit and Identity Theft” Input pinnaclebank as password 8 Steps to Effective Home Buying Education Click 8 Steps To Buy at the top

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